When Maxine Goldsmith received a full refund from United Airlines, she expected to receive, you know, a full refund. She didn’t.

And now she wants to know if a business can keep your money simply because of a policy that says it can keep your money. It’s a question that’s come up a time or two on this site, and I have an answer. I’ll get to that in a minute.

Back in October, Goldsmith and her adult daughter booked two tickets from Newark to Cancún on United. They purchased the tickets through a travel agency, International Travel Network (ITN).

Total cost: $1,727.

Then the Zika outbreak happened. Goldsmith’s daughter is pregnant. “Her doctor told her to cancel the trip,” she says.

United waived its refund rules, allowing passengers to cancel their flights after the Zika scare, a highly unusual and compassionate gesture.

The airline refunded her ticket, which came to $912, sending the money to ITN. Not so fast, said ITN — before we can refund any of the money to you, we need to see a doctor’s note confirming you’re pregnant. Her daughter sent a letter.

“An ITN agent told her that half of ITN’s ticket portion, $407 would be refunded,” she says.

Huh? Only half?

Here’s the outrageous part: Goldsmith and her daughter even purchased travel insurance, just in case. Given that United refunded ITN, why would it keep the money?

“I believe that the remaining cost of the tickets should be refunded,” she says.

If you think this kind of thing never happens, think again. A few years ago, I mediated Nartach Djepbarova’s case. He had to cancel a Delta Air Lines flight after having jaw surgery.

He’d missed a flight connection from Cleveland to New York because of bad weather, and was a no-show at check-in time.

But when he phoned the Quality Airport Hotel Dan, it let him off the hook. “We will cancel the reservation and will not charge a cancellation fee,” a representative told him. He even was able to get their promise in writing.

The agency sent a refund to Otel.com. But it refused to return the money to Constantinescu.

“We are really sorry,” an Otel.com representative wrote. “As much as we want to issue a refund, we are bound by the hotel’s terms and conditions so we do not have any control over the charges associated with the reservation.”

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That’s outrageous. For sake of argument, I know agents sometimes charge a booking fee of around $25. If they kept $25, that would be somewhat reasonable. They did do the work. But over $400? Shameful.

teddybeargraham

make sure this article gets referenced every time one of these articles says if original poster just had a travel agent everything would have been fine.

Sarah

Travel agencies offer a service, and if for reasons outside of the agency’s control plans go south, they’ve still rendered the service. United Airlines is a big business and can afford to make gestures of goodwill – that expense was probably attributed to the marketing budget. A small business doesn’t have the same luxury. The small business had to pay for staff, overhead, and payment processing fees. That said, keeping half of the refund is a bit much. Ideally, companies should create a policy in these instances that cover their upfront expenses in providing the service, anywhere from a $25 – $100 fee seems reasonable to me.

AJPeabody

Theft, pure and simple. Use every remedy available, including social media shaming.

DCbackpacker

I’ve never used a travel agent before, so I’m not sure of the whole process.

Here’s my question: she purchased the flight through an agent, did she pay a fee outside of the flight costs already or was the fee included in the flight costs? Is that a standard industry practice? I would understand an agency having a fee associated with the use of their services and I would be fine with that portion being kept.

Have you seen the agency’s policy that indicates half of a refund would be kept? Is there any way for insurance to cover the other half?

And why, yet again, did the insurance crap out in what for them should be a simple scenario?

Rebecca

I googled ITN and they’re selling through a consolidator called “asaptickets”. They are registered in California. File a complaint. Seller of Travel rules in CA may not necessarily allow a refund, but generally things like this are highly discouraged. The website is below with the information on their page:

I have no problem with a travel agent charging a reasonable fee to book your trip or even with an additional reasonable fee to handle a cancelation if they must. But this is outrageous. Also, if the airline refunded the airfare, what difference does it make to the agency? No additional paperwork should have been required. I will definitely never use this particular agency. I would also like to hear from someone who thinks that this is a fair practice.

MarkKelling

No mention of this OP having insurance was made. Also, I don’t know if insurance would have paid since the airline did refund the ticket in full anyway.

Rebecca

I searched some more and found their terms (another site – same company “air concierge”). Their terms EXPLICITLY state there is a charge of $250 to “process” a refund. Unfortunately, I don’t think there is much the OP can do here. The cost to refund 2 tickets would be $500. Is it right? Absolutely not. But that’s why you shouldn’t use shady companies like this. Also check out the Trip Advisor thread.

“Refunds: If fare rules allow refunds, a $250 processing fee will be charged along with any airline penalty.

Consolidators often take comparatively large markups on tickets, especially if the resultant price is still less than what could otherwise be obtained. Perfectly legal, common, and fair.

Here, ITN added an $815 markup to UA’s $912 (a 47% margin which is not all that bad in the general world of retail). They refunded UA’s $912 in whole and half of the $815. Apply their stated 2x$250 refund fee and the overall situation, while not ideal, is defensible and legal.

MarkKelling

You know, I guess I need to stop reading these articles before I have my morning coffee. I read it to mean the agency was keeping half of the refunded airfare, not half of the added on amount the OP paid in addition to the airfare. I still believe this is an excessive fee allowable or not.

Rebecca

I googled the companies. ITN actually owns 3 consolidator websites, all listed on their homepage. Its just a shady enterprise. You can search fares on 1 of the 3 sites. It automatically displays the lowest fare within the next 11 months, no matter what dates you enter, and tells you to call to book. I searched the reviews of these also, and every single review is either a 1 star bad review or fake. Really makes me wonder how people fall for this.

Nathan Witt

“Here’s the outrageous part: Goldsmith and her daughter even purchased travel insurance, just in case.” So, apparently, they did buy insurance. But I’m sure pregnancy is a preexisting condition…

pauletteb

I always appreciate knowing what businesses to avoid in the future!

flutiefan

thank you for this info. makes a lot more sense now.

Maxwell Smart

not outrageous at all. Any decent travel insurance would have covered the cancellation fees.

Maxwell Smart

a complaint based on what ? Get over it. Make an insurance claim.

Maxwell Smart

trip advisor ? Now that’s dodgy. You can pay a small fee to someone is India to give you 1,000 +ve comments & your opposition 1,000 -ve comments & you can never even stop this sort of thing.

Harvey-6-3.5

Same here!

AMA

I can’t imagine any circumstance where RT Newark>Cancun would be a $971 ticket unless they were flying first-class. Did OP give any details about the fare? If that slimy travel agency charged them a 50% markup for the original tickets, they should be shamed on Tripadvisor and social media.

42NYC

I know travel agents serve a purpose in some situations but is it really necessary to use one to fly from Newark to cancun??

On a recent trip to an all inclusive to riviera maya the resort appeared to be full of guests who booked through Apple vacations. Many from New England and the Midwest. After the third time I overheard someone brag about how much money they saved on the trip I had to question them. Yes, they saved “40% by booking flights hotel and airport transit together” but were shocked that my wife and I still booked the trip for $1200 less than they paid (we flew from NYC they flew from Rochester which may account for sone of the difference.) I appreciate a travel agent can handle difficult bookings – we used one for help on a two week trip to Patagonia. Would never use one for a beach trip to Mexico

Peter

Maxwell Smart (?) apparently does. Rather vociferously.

Lindabator

But it might have been a bulk ticket, or consolidator fare, and the agency may be on the hook for the balance. Frankly, I have rarely charged a client for a cancellation, as they are usually for legitimate reasons. But sometimes they do cancel for no good reason, but the fee is never THAT high.

Lindabator

they are NOT a travel agency – they are a wholesaler – BIG difference.

Lindabator

She didn’t book with an agent – she booked through a consolidator – big difference.

Lindabator

These guys are NOT a travel agency, but a ticket wholesaler – big difference, Chris!

Lindabator

these guys are ticket consolidators, and have HEAVY cancellation fees – the airline probably refunded the bulk price they gave the agency, and that is what they refunded back, but they kept their override. It does happen in those cases, and a simple click on the T&C shows they have a $250 per ticket cancel fee.

Lindabator

Actually can find much better rates, and booking with us means NOT having to pay everything up front. And with our relationships with the vendors and hotels, means no WALKING when overbooked, and moving you at no cost when unsatisfied. Does not always come down to price alone, but the service and amenities we can provide.

42NYC

thats fair. but is the ‘service and amenities’ worth $1200 on a $5000 trip?

Don’t get me wrong, when my wife and I shelled out $15k to go to Chile & Argentina for a couple of weeks staying in some remote lodges in a country where we dont speak the language or have easy access assess the best guides, hotels, etc… using an agent was a no-brainer. When I can read up on every hotel online at a destination thats 3 hours away and has multiple flights a day, i see less of a need. But thats just me.

Lee

Just another example why I book all my travel directly with the airline or lodging or whatever – So far, everything I have wanted to do/visit, I have been able to book without any middle-person – no consolidators, travel agents, etc.

Of course, they expect to be paid and some have awful terms and conditions which they know few people will ever read. Is this ethical to keep this much of the refund? No, not in my opinion but if it’s in the contract, well, it’s in the contract. An unfortunate live and learn and since there is a travel insurance here – is that not covering this?

LonnieC

Mark: This from Chris’ description of the case: “Here’s the outrageous part: Goldsmith and her daughter even purchased travel insurance, just in case….”

LonnieC

Fees from Rochester to New York City would be about $200-350 per person, I believe.

Jason J Olson

Probably no insurance claim here. Most travel insurance companies are not covering trip cancellation for fear of catching something infectious.

Jason J Olson

$400 is a bit much but a service fee from $25-100 is reasonable. The airline didn’t take any time on their own to book the seat, however the agent did. The airline can recapture revenue through selling that seat again. A real agent (person) cannot reclaim those lost hours of the day. However, if all of the transactions was electronic (ie true online, and they didn’t call anyone at ITN) then it might be a completely different story.

Jason J Olson

One problem I’m having to sort out is all of the different numbers… $912, $1727 and $1771 — none of those correlate to each other.

Flywisely

I think we are confusing a lot of people when we try to differentiate between kinds of travel agencies.
ITN says they are ASTA members and have ARC/IATAN accreditations.
So they are a travel agency.

The problem is that they are dodgy.

Flywisely

Rebecca, agents still have to disclose their fees beforehand . And I assume they have to be reasonable.

I wonder how the LW’s credit card was charged? Were the fees separate?
Was the ticket price charged as a pass-thru with UA as the merchant?
Was ITN the credit card merchant (it assumed about 3.5% in fees)?
Lots of questions here and lessons to be learned.

MarkKelling

Yes, going on a once in a lifetime trip to South America like you did is definitely a trip requiring a travel agent — no matter how much travel you do and even if you already did the research and decided the basics of what you want, having that somebody to call when things don’t go well is priceless.

Flying home to visit the relatives on an off weekend with no concrete plans? Eh, I will take the chance of booking it myself. With the level of status I have with the two airlines I would fly, I think they will take care of me (Always have even when flying home at Christmas during a blizzard. I made it even with 4 different flight cancellations! All due to a very helpful airline employee who was very much in the Christmas spirit of giving.)

MarkKelling

So, how does one find a GOOD travel agent? I mean a real body I can visit and call on the phone. Any suggestions?

I have been using the one my employer has and enjoy the service provided. Unfortunately, “in order to serve you better” (i.e save money!!) they are moving to an online service hosted by one of the big guys in online travel. The big thing is the inflexibility of flight booking — it defaults to lowest possible price option even for personal travel needs and I am not a lowest possible price type person. I am not happy or impressed and am considerably reluctant to use them for my important vacation travel.

Flywisely

Ok follow this for a while:

The 2 tickets cost $1,727 together.
If a decent TA sold this, the whole amount will simply be charged as a credit card pass-thru to the carrier (UA) via ARC. When United refunds, the whole amount will just go back to the original Form of Payment (FOP) which is the customer’s credit card.

Notice that the carrier (UA) only refunded $912 to the customer.
That leaves $815 unrefunded.

So you ask how is it possible that the carrier issues a FULL refund but only $912 went back to the customer? The reason is that the $815 amount was charged most likely differently (as a split kind of payment).
Bottom line when the carrier refunds, only the $912 is directly refunded to the customer’s FOP. The rest is refunded to the AGENCY.
It is now up to the agency to determine how much of the $815 to give back to the customer. It said only half of it will be returned.
That means $204 of the original ticket price of $863.50 will kept by the travel agency. That is insane!

This is not how honest agencies operate.

Flywisely

Just to very clear, That $250 is the agency’s fee. Not the airline’s.

KanExplore

Looks worth investigating to me. If this is a shady operation, it’s worth bringing that to light. If they have some valid explanation, they should be given the chance to offer it. Based on what we know, it does look like they should be refunding the full amount, less a responsible processing fee based on their time in dealing with the client.

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